2024-05-03 14:37:06 ET
Summary
- I see JD.com, Inc. stock now as an excellent GARP opportunity (good growth at a reasonable price).
- The stock trades at ~10x FWD P/E and I expect double-digit EPS growth rates.
- Thus, the PEG ratio is near or below 1.0x, the threshold of an ideal Peter Lynch pick.
- Its ongoing share buybacks add the icing on the GARP cake, showcasing its capital flexibility and enhancing total share return potential drastically.
JD stock is now a good GARP opportunity
I wrote a few pieces on JD.com, Inc. ( JD ) back in July 2022 to caution investors about the risks associated with the stock. At that time, the stock had been trading at a price of almost $60 (see the chart below). My main concerns at that time included valuation risks and its profitability outlook. Quote:
JD.com, despite its inferior profitability and lack of diversification of income streams, trades at a considerable premium, not only relative to Alibaba but also to the overall market. Furthermore, it underspends on R&D by ~5x and harvests lower yield on R&D by ~1.5x compared to Alibaba.
Read the full article on Seeking Alpha
For further details see:
JD.com Stock: Valuation Normalization And Rating Upgrade